LifeStance Health Group, Inc.'s (NASDAQ:LFST) Path To Profitability

We feel now is a pretty good time to analyse LifeStance Health Group, Inc.'s (NASDAQ:LFST) business as it appears the company may be on the cusp of a considerable accomplishment. LifeStance Health Group, Inc., through its subsidiaries, provides outpatient mental health services to children, adolescents, adults, and geriatrics in the United States. The US$2.0b market-cap company’s loss lessened since it announced a US$57m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$16m, as it approaches breakeven. As path to profitability is the topic on LifeStance Health Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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LifeStance Health Group is bordering on breakeven, according to the 7 American Healthcare analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$13m in 2026. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 118% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for LifeStance Health Group given that this is a high-level summary, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for LifeStance Health Group

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of LifeStance Health Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – LifeStance Health Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is LifeStance Health Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether LifeStance Health Group is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on LifeStance Health Group’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.